Currencies

Investors’ enthusiasm for UBS’s inaugural Swiss covered bond on Monday vindicated the bank’s decision to enter the market and allowed it to achieve its main goals, officials at the bank told The Cover yesterday (Tuesday).

Banco Bilbao Vizcaya Argentaria is understood to have gathered more than Eu1bn of orders for a five year issue that is officially being marketed at 28bp-30bp over mid-swaps.

Barclays Bank is expected to price its debut, 10 year covered bond at 60bp over mid-swaps, the tight end of official 60bp-65bp guidance. Already another UK bank has mandated for a new covered bond in what could be the second busiest week ever in the market.

Danske Bank has mandated BNP Paribas, HSBC and UniCredit to manage a new issue alongside itself. The banks are in discussion with clients about a potential six year transaction, said a syndicate official at one of the leads.

National Bank of Greece will price the first Greek covered bond benchmark tomorrow (Wednesday) morning, a Eu1.5bn seven year issue at 90bp over mid-swaps.

Barclays Bank will tomorrow (Tuesday) launch the first benchmark UK covered bond since November 2007 and the first since the Regulated Covered Bond regime came into effect, a 10 year deal that is expected to be at least Eu2bn and at price talk tighter than that heard last week. The deal will hit another frenzied week for covered bonds, with at least two further issues likely in the coming days on top of three today (Monday), and more new names in the pipeline.

UBS made an impressive debut in the covered bond market this (Monday) morning, gathering over Eu7bn of orders. Unicaja also got off to a strong start in the asset class with its inaugural issue, while Swedbank Mortgage will price a larger than expected deal, even if bookbuilding was the slowest of the morning’s deals.

Caja Madrid yesterday (Thursday) priced the biggest Spanish covered bond issue since May 2008, but one that, according to a syndicate official at one of the leads, prudently balanced size and price.

Stadshypotek yesterday (Thursday) priced a Eu1.5bn five year covered bond, the first new issue launched since the European Central Bank’s purchase programme started that is not eligible for the scheme. But the issuer’s strong credit and cover pool gave it confidence that this would not be a worry for the transaction, it told The Cover. And the Swedish deal already has a successor, with Swedbank Mortgage lined up to launch a seven year issue early next week.

ING yesterday (Wednesday) priced a Eu2bn five year covered bond that is the tightest and largest five year or longer benchmark issued outside Germany this year, according to one of the leads.

Stadshypotek this (Thursday) morning reopened the Swedish covered bond segment with a five year benchmark, while Caja Madrid will this afternoon price its first issue of the year, a Eu1.75bn seven year cédulas hipotecarias. Meanwhile, UBS has announced the mandate for its debut.

Banco Comercial Português yesterday (Wednesday) priced its first covered bond benchmark since April 2008, but a full new issue pipeline and a strong performance of outstanding Portuguese covered bonds prompted the issuer to forego a roadshow and a market sounding in preparation of its transaction, according to one of the leads.